Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Hansard source

Yes, it is pretty disgusting when you think about it. But the fact of the matter is that the time has come for real reform in this area and we will have to find ways in which we, the federal government, can have a much greater say in the manner in which taxpayers’ money is finally expended. The classic agreement is the health care agreement—I said it was 47c in the dollar; it is now 50c in the dollar. The next time we negotiate that agreement we should not pay the money to the states; we should pay the money directly to the hospitals. We should say what is a fair share of the money we collect and is paid by way of a special purpose grant. We should say which hospitals are entitled to get money and not be starved at the whim of a government.

The fact of the matter is that the GST is completely without restriction; the states can spend that as they will—and they have a better growth tax than we have in income tax. In a report that was done for me by Access Economics, when I was Minister for Aged Care in the International Year of the Older Person, it was shown very adequately that indirect taxes are necessary to maintain a solid tax base. We have given this tax, with its growth, to the states and territories and they have been incapable of handling it in a responsible manner. They have spent it in a profligate manner which has left our states lacking in law and order; lacking in proper infrastructure for our water, sewerage and roads; and lacking in our transport systems.

The trains in country New South Wales now travel more slowly than they did 100 years ago. Do you know why? Because if they travel faster the vibration could cause the bridge to fall down. The reason why I have been a long-time convert of accrual accounting is to make people put the money away for the maintenance of their own assets. But have they done it? No. The hollow logs, started by Neville Wran, have come back to haunt us all. I am afraid that, with our giving this money untied in any way and forgoing the right to say how it is spent, we have just added to vertical fiscal imbalance. A solution has to be found. Those are some of the things that I give as examples when I say that we need tax reform.

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